Hungry for housing, Palo Alto brings back divisive zoning method

Council votes to restore 'planned community' tool to encourage residential development

In a bid to encourage more housing, the City Council voted on Feb. 3 to bring back the "planned community" zone, which allows developers to negotiate with the city over development standards such as height, density and parking requirements. Photo by Veronica Weber.

Eager to pull the city out of its prolonged housing rut, the Palo Alto City Council agreed on Monday to resurrect a zoning tool that has been used in the past to produce some of the city's most significant — and contentious — developments.

Two days after the council agreed to make housing a top priority for 2020, members voted unanimously to bring back the "planned community" zoning process to stimulate more housing construction. The council had agreed to stop using the planned community process in 2013, just after voters overturned in a referendum the last project to rely on that zoning designation — a 60-apartment building for low-income seniors and 12 single-family homes on Maybell Avenue.

On Monday, much as at their annual retreat on Saturday, council members stressed the importance of both making progress on the city's housing goals (as outlined in the Comprehensive Plan) and in creating housing for teachers, service workers and other employees who are struggling to afford to live in the city.

Planning Director Jonathan Lait noted at the onset of Monday's presentation that despite an extensive Housing Work Plan, the city is not on pace to meet the goal of the Comprehensive Plan, which calls for producing about 343 units annually.

"It is also anticipated that items in the Housing Work Plan will not get you there either, not without additional changes to our development standards or other conditions that make housing production more feasible," Lait said.

The planned community zone, which allows builders to exceed development standards such as height and density limits in exchange for negotiated public benefits, is the most dramatic of the new tools under consideration.

In the past, it has been used by residential and commercial builders with varying degrees of success. The tool has been effective in creating affordable-housing developments such as Alma Place at 753 Alma St. and the Treehouse at 788 W. Charleston Road. City staff estimated that planned community projects and development agreements (which similarly allow builders to negotiate with the city over zoning standards) accounted for about 64% of Palo Alto's housing units in the past 20 years.

The zoning tool has also sparked some of Palo Alto's most bitter and prolonged community disputes, with most of them centering on "public benefits" the developers had promised to provide but then failed to deliver. There was the redeveloped Edgewood Plaza, where the developer promised to restore a historic building but destroyed it instead. There was the public plaza near Sheridan Apartments, a public benefit that effectively became the patio dining area for Caffe Riace.

The most recent — and egregious — example is the College Terrace Centre, a development at El Camino Real and College Avenue that won approval a decade ago and that included as its primary benefit a grocery store. Once built, however, the development has had trouble keeping the grocery tenants, with two shuttering after only months, leaving the market space vacant. Khoury's Market closed shop last month, and the city is preparing to start fining the building owner for violating the terms of the zoning agreement.

The new planned community zone that Lait proposed would differ from past ones in several critical ways. It would only allow residential projects and mixed-use developments that provide enough housing to offset the jobs they produce. And the public benefit would be, exclusively and in all cases, housing.

"I say that with a little bit of hesitation, because I know that term generates a certain amount of reaction from folks in the community," Lait said of the planned community zone. "But as we think about housing production, the concept here is to introduce for the council an idea where we're not negotiating public benefits with property owners in exchange for certain development standards."

"The idea is that housing in and of itself — the production of housing units, including affordable-housing units — would in fact be a public benefit," Lait said.

While council members have attacked planned community zoning in the past (Councilwoman Lydia Kou, Vice Mayor Tom DuBois and Councilman Eric Filseth all opposed the Maybell Avenue development in 2013), they agreed on Monday that it's time to give the tactic another chance. Councilwoman Liz Kniss pointed to the dearth of housing proposals that the city has seen since 2013.

"We put (planned community) on hold ... we hesitated to deal with it again. In the meantime, the only affordable housing (project) that (has) gone through is one — and that's drained our coffers dry. We don't have anything else," Kniss said, referring to the 59-unit development called Wilton Court, which the council approved last year and which is slated to break ground in the fall.

Mayor Adrian Fine, who made the motion to bring back the planned community process, noted that staff is currently working on about two dozen housing programs and is not getting any tangible results. A more effective approach, he said, could entail asking developers to come in with proposals and have them work with staff to overcome the zoning hurdles that in many cases make residential developments financially infeasible to construct. These, according to Lait, typically involve parking standards that many developers say are too onerous.

In proposing the new program, the council is seeking to meet both its own housing targets and the increasingly stringent and ambitious state mandates for residential production.

Palo Alto is almost certain to fail to meet its regional allocations for low-income housing, which means that the city will be subject to Senate Bill 35. The 2016 state law creates a streamlined approval process for developers looking to build in cities that fail to meet their housing allocations.

By failing to meet its quota for below-market-rate units, housing projects in Palo Alto that offer at least 50% of their units at that level would have a right to win approval within 60 days.

If the city fails to meet its allocation for "above moderate" income units, consequences would be even more severe. In that case, the streamlining provision of SB 35 would start to apply to projects that designate just 10% of their units for affordable housing.

To avoid that eventuality, the city must generate 587 units in the "above moderate" income category in the 2015-2022 cycle of the state's Regional Housing Needs Allocation process. So far, the city has permitted 423 units.

In restoring the planned community zone, council members underscored its new residential-centric function by renaming it the "planned housing zone." Filseth and Kou both stressed the importance of making sure a significant number of housing units can accommodate residents with low and moderate incomes -- those making up to 120% of area median income (AMI). For a four-person household in Santa Clara County, 120% equals $157,680. For an individual, 120% AMI is $110,400.

"I think given the need for the 300 units a year and the focus on trying to attenuate the flight of 120%-AMI workers, I think this is a reasonable direction," Filseth said.

Council members also indicated Monday that they are also willing to invest more money in affordable housing. Having already contributed $20.5 million in loans to the 59-unit Wilton Court projects, which is geared toward low-income residents and adults with a disability, council members agreed to explore a tax to raise additional funding for affordable housing.

DuBois said he would like to see a portion of the council's planned business tax go to affordable housing. Councilwoman Alison Cormack said she would prefer to see a parcel tax.

"I think it's eminently appropriate for people who own property here to participate in making it more affordable for others," Cormack said.

Hungry for housing, Palo Alto brings back divisive zoning method

Council votes to restore 'planned community' tool to encourage residential development

Eager to pull the city out of its prolonged housing rut, the Palo Alto City Council agreed on Monday to resurrect a zoning tool that has been used in the past to produce some of the city's most significant — and contentious — developments.

Two days after the council agreed to make housing a top priority for 2020, members voted unanimously to bring back the "planned community" zoning process to stimulate more housing construction. The council had agreed to stop using the planned community process in 2013, just after voters overturned in a referendum the last project to rely on that zoning designation — a 60-apartment building for low-income seniors and 12 single-family homes on Maybell Avenue.

On Monday, much as at their annual retreat on Saturday, council members stressed the importance of both making progress on the city's housing goals (as outlined in the Comprehensive Plan) and in creating housing for teachers, service workers and other employees who are struggling to afford to live in the city.

Planning Director Jonathan Lait noted at the onset of Monday's presentation that despite an extensive Housing Work Plan, the city is not on pace to meet the goal of the Comprehensive Plan, which calls for producing about 343 units annually.

"It is also anticipated that items in the Housing Work Plan will not get you there either, not without additional changes to our development standards or other conditions that make housing production more feasible," Lait said.

The planned community zone, which allows builders to exceed development standards such as height and density limits in exchange for negotiated public benefits, is the most dramatic of the new tools under consideration.

In the past, it has been used by residential and commercial builders with varying degrees of success. The tool has been effective in creating affordable-housing developments such as Alma Place at 753 Alma St. and the Treehouse at 788 W. Charleston Road. City staff estimated that planned community projects and development agreements (which similarly allow builders to negotiate with the city over zoning standards) accounted for about 64% of Palo Alto's housing units in the past 20 years.

The zoning tool has also sparked some of Palo Alto's most bitter and prolonged community disputes, with most of them centering on "public benefits" the developers had promised to provide but then failed to deliver. There was the redeveloped Edgewood Plaza, where the developer promised to restore a historic building but destroyed it instead. There was the public plaza near Sheridan Apartments, a public benefit that effectively became the patio dining area for Caffe Riace.

The most recent — and egregious — example is the College Terrace Centre, a development at El Camino Real and College Avenue that won approval a decade ago and that included as its primary benefit a grocery store. Once built, however, the development has had trouble keeping the grocery tenants, with two shuttering after only months, leaving the market space vacant. Khoury's Market closed shop last month, and the city is preparing to start fining the building owner for violating the terms of the zoning agreement.

The new planned community zone that Lait proposed would differ from past ones in several critical ways. It would only allow residential projects and mixed-use developments that provide enough housing to offset the jobs they produce. And the public benefit would be, exclusively and in all cases, housing.

"I say that with a little bit of hesitation, because I know that term generates a certain amount of reaction from folks in the community," Lait said of the planned community zone. "But as we think about housing production, the concept here is to introduce for the council an idea where we're not negotiating public benefits with property owners in exchange for certain development standards."

"The idea is that housing in and of itself — the production of housing units, including affordable-housing units — would in fact be a public benefit," Lait said.

While council members have attacked planned community zoning in the past (Councilwoman Lydia Kou, Vice Mayor Tom DuBois and Councilman Eric Filseth all opposed the Maybell Avenue development in 2013), they agreed on Monday that it's time to give the tactic another chance. Councilwoman Liz Kniss pointed to the dearth of housing proposals that the city has seen since 2013.

"We put (planned community) on hold ... we hesitated to deal with it again. In the meantime, the only affordable housing (project) that (has) gone through is one — and that's drained our coffers dry. We don't have anything else," Kniss said, referring to the 59-unit development called Wilton Court, which the council approved last year and which is slated to break ground in the fall.

Mayor Adrian Fine, who made the motion to bring back the planned community process, noted that staff is currently working on about two dozen housing programs and is not getting any tangible results. A more effective approach, he said, could entail asking developers to come in with proposals and have them work with staff to overcome the zoning hurdles that in many cases make residential developments financially infeasible to construct. These, according to Lait, typically involve parking standards that many developers say are too onerous.

In proposing the new program, the council is seeking to meet both its own housing targets and the increasingly stringent and ambitious state mandates for residential production.

Palo Alto is almost certain to fail to meet its regional allocations for low-income housing, which means that the city will be subject to Senate Bill 35. The 2016 state law creates a streamlined approval process for developers looking to build in cities that fail to meet their housing allocations.

By failing to meet its quota for below-market-rate units, housing projects in Palo Alto that offer at least 50% of their units at that level would have a right to win approval within 60 days.

If the city fails to meet its allocation for "above moderate" income units, consequences would be even more severe. In that case, the streamlining provision of SB 35 would start to apply to projects that designate just 10% of their units for affordable housing.

To avoid that eventuality, the city must generate 587 units in the "above moderate" income category in the 2015-2022 cycle of the state's Regional Housing Needs Allocation process. So far, the city has permitted 423 units.

In restoring the planned community zone, council members underscored its new residential-centric function by renaming it the "planned housing zone." Filseth and Kou both stressed the importance of making sure a significant number of housing units can accommodate residents with low and moderate incomes -- those making up to 120% of area median income (AMI). For a four-person household in Santa Clara County, 120% equals $157,680. For an individual, 120% AMI is $110,400.

"I think given the need for the 300 units a year and the focus on trying to attenuate the flight of 120%-AMI workers, I think this is a reasonable direction," Filseth said.

Council members also indicated Monday that they are also willing to invest more money in affordable housing. Having already contributed $20.5 million in loans to the 59-unit Wilton Court projects, which is geared toward low-income residents and adults with a disability, council members agreed to explore a tax to raise additional funding for affordable housing.

DuBois said he would like to see a portion of the council's planned business tax go to affordable housing. Councilwoman Alison Cormack said she would prefer to see a parcel tax.

"I think it's eminently appropriate for people who own property here to participate in making it more affordable for others," Cormack said.

Comments

Dan Midtown
on Feb 4, 2020 at 12:09 am

Dan,
Midtown
on Feb 4, 2020 at 12:09 am

81 people like this

This is total BS.

Mayor Adrian Fine, who made the motion to bring back the planned community process...

Great ... more office space with "community benefits". I guess the cars overflowing onto streets, traffic and developer profits ARE the community benefit.

"I think it’s eminently appropriate for people who own property here to participate in making it more affordable for others," Cormack said.

The pro-growth faction are currently in the majority on the CC and that may well not continue to be the case after the November election. I anticipate that they will try to push through as many developer-friendly resolutions as possible while they still can. FYI PAF really pushed their followers to make their voices heard wrt this year's CC priorities and this has given the (mis-)impression of strong public support for the CC's recent action.

I wonder if the present majority on council just wants to give a big gift to the owners of Frye’s sight and the adjacent Mikes Bikes site in the north Ventura area.
( Both are owned by Sobrato) by offering PC zoning.
The special plan for the area has not yet produced much and what was presented at the last meeting, after a lot of false starts and lack of progress over 18 months, was not well received by the committee working on it or the public.
.......Why have a public process when you can just use your power to get what you want???

The idea of zoning being a one-off negotiated by staff in private and rubber stamped by commissions and council
Is a step backwards and will not help anyone to find better more affordable housing but it will help developers get richer and meet the arbitrary growth numbers assigned by regional agencies at the behest those in Sacramento who desire to consolidate power at the state level.

Tonight’s action showed a disturbing lack of interest in and concern for the residents and small business owners of this city.

Cornacks introduction of a parcel tax on property owners to pay for affordable housing, rather than the proposed business tax creating a revenue source for BMR housing, appears to be petty in its motivation and quite cynical.

I hope everyone remembers this night when they vote in the fall !
Vote no on Tanaka and Fine

This does absolutely nothing to benefit residents. It does everything to benefit non-residents who wannebe.

No mention of parking, of public transport, of water, of park space, of traffic, of space in schools, of recreation, in fact nothing mentioned of anything that remotely sounds like quality of life.

Yes build rabbit hutch units with no amenities and we will all suffer claustrophobic over-crowding as we compete for space on the streets, space to park, space in the parks, etc. Instead of having a life in Palo Alto, it is going to be survival mode.

We need a couple of people who are willing to run for Council who actually consider residents' needs first and look at practical issues rather than this council who can't see beyond the end of their long noses, Pinnochio style.

To Council members Cormack and DuBois and others:
We already do pay taxes - both property taxes and sales taxes (9%!) that finance the city to undertake objectives like affordable housing and grade crossings. Whether the city manages its money well enough to devote funds to these objectives is the city's lookout, not ours. (Recent generous raises and $455 million in unfunded pension liabilities)

According to the Post, the city's CAFR (financial report) reports two consecutive City of Palo Alto budget surpluses, $59.5 million last year, and $76 million this past year. Use those and other monies. No new TAXES!

"Vice Mayor Tom DuBois said he would like to see a portion of the council's planned business tax go to affordable housing. Councilwoman Alison Cormack said she would prefer to see a parcel tax."

"I think it's eminently appropriate for people who own property here to participate in making it more affordable for others," Cormack said."

"Cornacks introduction of a parcel tax on property owners to pay for affordable housing, rather than the proposed business tax creating a revenue source for BMR housing, appears to be petty in its motivation and quite cynical."

Absolutely outrageous, esp. since she was backed so heavily by the Silicon Valley Leadership Group composed of big tech.

Google just announced quarterly results AND plans to continue its aggressive hiring and expansion. Tax THEM for a change,

The city made a big mistake of creating too many jobs in this city without enough housing for all the employees. The result is streams of traffic coming into the city every morning and resulting congestion and pollution. They need to fix the problem somehow, either by limiting jobs (especially for jobs that use out-of-town labor) or increasing housing in the city.

Housing does not have to be land-intensive single family homes. Why are there so few tall apartment buildings in Palo Alto, especially near public transit hubs?

@Unanimous vote
developers were waiting for SB50, pro-unplanned unfettered growthers, such as Adrian Fine is just diverting the attention to housing from commercial office and R&D.

Buildings are being demolished to rebuild new office buildings with same square footage, but hiring practices are to fill in the square footage - 1 employee per 80 square feet.

There may be a cap on office space growth but not on employees. Alison Cormack’s statement ...
"I think it's eminently appropriate for people who own property here to participate in making it more affordable for others,"

Let’s start with the businesses, especially in tech and R&D, reduced your rents.

> Housing does not have to be land-intensive single family homes. Why are there so few tall apartment buildings in Palo Alto, especially near public transit hubs?

Because no one in Palo Alto wants more housing to be built.

They want the supply constrained so that their property values remain high, to put it simply. They like to use lots of lame excuses too, like "but think of the traffic!" and "but it needs to be more affordable and BMR!" to prevent a perfectly good housing project from being built. If we housed more people in this city, then we'd have less out-of-town traffic coming in each morning, and we'd have a more affordable housing market with an increased supply.

We then have people like Lydia Kou, who is a realtor, on the city council who block housing proposals whenever she gets the chance, so that she can keep her commission checks nice and fat whenever she sells a home in Palo Alto. The fact that she doesn't recuse herself from any housing related council discussions is reprehensible.

Building housing in Palo Alto at this point feels like an utterly lost cause. We will continue to see the cost of living in this city rise and we will continue to see the "character of the neighborhood" change--like longtime business Prolific Oven being priced out of the city--whether we build housing or not.

I wonder ....
George no one except developers have blocked “perfectly good housing projects in PA.”

Sobrato has a “perfectly good housing project” with retail
On the ground floor at the former mikes bikes location
On ECR that they decided not to build despite the
Fact he similar mixed use projects are being built close by.

So not PA city process or any I’ll will towards building housing from city leaders, just the desire to hold out for even more profit.

The need for an emphasis on BMR housing is in response to the fact that, based on regional and state housing authorities , that is what we need as we are making our quotas for market rate housing.

I think we should stop building where our infrastructure cannot safely support it anymore - what a joke saying that all problems are solved near “transit” - and require businesses with more than a certain number of employees to reduce their local workforce’s. Both by legislation and taxation to pay for just low-income housing

We already have predictions of greater loss of life in foreseeable emergencies because of density. We live in an area prone to drought in which people are asked to make considerable sacrifices before adding more people. There are huge cost of living and safety implications, and NEGATIVE environmental implications to continue redeveloping to be SF mini me here.

I want to see the council address the demand side, and limit development of housing to only affordable housing. We need to tax large businesses, which currently don’t even pay their way for development applications, to pay for it. The Council should be pushing the state to redevelop other cities like Stockton or even Sacramento, that might want to become another job center.

California already has a tenth it twelfth of the country’s population. We really don’t need to make it possible for all of them to live here. This is not an island, we do not have to become Hong Kong (which, by the way, did not ever make it anymore possible for people to have shorter commutes than LA or for people to live near their jobs, or to have affordable housing, with all the dense building and the best transit system in the world. And they built densely for precisely the same purposes here. This really is a choice between putting a limit on corporate growth that the community ends up paying for and doesn’t need - and even makes the community more vulnerable and less resilient during recessions - and becoming HK.

A lot of parts of CA have homes in the mid $100,000 range. There is your affordable housing. If they want the jobs, they need civic investment from the state, and we need to tax the largest companies heavily enough to get them to move and pay for the affordable housing we need here.

"Councilwoman Alison Cormack said she would prefer to see a parcel tax. 'I think it's eminently appropriate for people who own property here to participate in making it more affordable for others,' Cormack said."

Cormack wants the residents to subsidize the problems caused by the over development of commercial property. Very amazing attitude.

California and the Bay Area needs housing! But if every town and community in the area insists that nothing change in the way they allow for new housing, the crisis cannot be solved. This long-time resident is prepared to encompass denser housing nearby.
I'm not a developer. But I don't think "developer" should be considered a dirty word if our state and communities are ever to build their way out of the housing shortage.

The approach of Cormack+ Fine is so wrong, don't know where to start.
Their vision is: techno-park with the dormitories across the street. See China, as an example (various flues are one of the many features of congestion). China, BTW is authoritarian; things like crime will get out of hand here quickly.

1. Total ban - full STOP - on office development;
2. No conversion of retail, dining, sports and recreation, etc. to any types of office or housing. So far, we are loosing what makes the quality of life.
3. Add transport, schools, and other infrastructure.
4. Build new, or convert old apartment buildings within the code and zoning.

Only in that order. What we are seeing, so far, is "manhattanization" without having any remotely good transit system. This is not about the influx from out of town. Thousands crammed into high-rises will not walk for groceries - look at the size of those shopping carts. They WILL DRIVE. Stop fooling yourselves and others.

>> > Housing does not have to be land-intensive single family homes. Why are there so few tall apartment buildings in Palo Alto,

How tall? What density of housing do you want on a particular site? 30 units per acre? 40 units? Please be specific.

>> Because no one in Palo Alto wants more housing to be built.

I'll be charitable and refer to this unfounded statement as a "canard".

>> They want the supply constrained so that their property values remain high, to put it simply.

This is a particularly obtuse version. You have been fooled by developer propaganda, pure and simple.

Posted by P A Resident for 44 Years, a resident of Green Acres

>> California and the Bay Area needs housing!

Nope. We need more housing than jobs. All these proposed projects to add 500 units of housing and 501 jobs are a recipe for disaster. We need to start converting SRP (Stanford Research Park) office buildings to housing. For example, let's tear down those ugly brutalism-lite towers at Palo Alto Square, and convert them to housing. That will reduce the number of jobs, and, increase housing.

We don't need "housing". We need to fix the jobs/housing imbalance. We will never do that through "PC" projects that add housing AND office space. It can't work.

Once again I agree with Allen Akin. This use of "PC" could help some; I see it as being worth a try.

As for property owners in Palo Alto being obliged to help make Palo Alto affordable for others, that's ridiculous. Suppose I wanted to live in Woodside or Atherton or Pebble Beach but could not afford to do so. Are the homeowners in those communities supposed to re-tool their communities to make room for all who want to live there AND pony up funds to make those communities affordable? OF COURSE NOT!

Several pro-growth CC Majorities ushered us into this messy corner by encouraging commercial development that was not mitigated housing-wise. And with nary a thought to infrastructure deficits. It is that very growth that is at the root of our housing shortage. And we will be paying for that growth in various ways for decades. Is Cormack overlooking that?

I agree with so much of what's been posted already...maybe there is some specific good PC that will emerge, but in general this whole push to put more and more housing in Palo Alto, without regard to the cost and quality of life impact of the existing residents, is infuriating.

But I also want to flag two big issues:

-one, the whole town of Palo Alto is almost technically a "transit hub", so if access to transit is a criteria for much denser housing, then an enormous amount of the town is impacted

-two, why do politicians assume that people will always work near where they live? what if someone moves to PA, starts working in PA, and then takes a job in Milpitas or Hayward or Fremont or Santa Clara? People switch job locations all the time. If the Bay Area were like NYC, then folks would most likely continue commuting with public transit. But this area is very very different. So in the end, more houses = more traffic. Anything else is a fantasy

>> -two, why do politicians assume that people will always work near where they live? what if someone moves to PA, starts working in PA, and then takes a job in Milpitas or Hayward or Fremont or Santa Clara? People switch job locations all the time. If the Bay Area were like NYC, then folks would most likely continue commuting with public transit. But this area is very very different. So in the end, more houses = more traffic. Anything else is a fantasy

Good point. I've been here for a long time, now. Often, -one- of couple will work in or next-door to Palo Alto, while the other will commute, often pretty far away. The probability that -both- members of a couple will work here is very low. That isn't how the job markets work. I think you could consider it from a gender-rights perspective: do "they" assume that the wife, if she works at all, will work in a nearby school or hospital (you know, the old teacher/nurse thing)? This "tech" thing we have here depends on a lot of people changing jobs every so often. There is almost zero likelihood of both members of a couple working right here. "They" should stop pretending otherwise.

"Is there a conversation that pushes for the densification of Atherton?"

I don't think there is. Palo Alto made the mistake of letting the camel get its nose under the tent, in the form of big business and developers and their cynical virtue-signaling lobbyists. They tighten their stranglehold on our government little-by-little, year-by-year. A revolution would be required now, for the residents to take back their town.

It has been incorrectly reported that Palo has a surplus of $76M this year and $59.5M last year. This is simply incorrect. Our financial Audit refers to "unallocated" funds, meaning funds that are not already spent through legal contracts and obligations - this is an auditing definition. However this money is not surplus - while not already spent, it is committed by the cities policies and may be for projects that are in motion or future obligations that are already incurred. From a financial viewpoint, the money is committed.

When you consider our unfunded pension liabilities, our unfunded medical obligations, rising construction costs for our planned infrastructure projects (such as police and fire stations), other aging infrastructure, and many programs that Palo Altans want to see that are not funded (things like the animal shelter, park improvements, a Cubberley community center and more), we do not have excess funds, and are faced with potentially needing to reduce services in coming years.

We strive to run the city on a conservative financial basis with reserves to deal with cyclical recessions. We have taken steps to address our unfunded liabilities. We reduce our priorities based on anticipated funding. Our long range forecast is showing a slight surplus of $1.2M this year (out of a $230M general fund budget), followed by several years of anticipated deficits. Please do not believe those that claim we have a $76M surplus. This is a misunderstanding of how goverment finances are reported in one report.

Committed, but, the city is not necessarily obligated to continue spending year-after-year, as it is on employee salaries and benefits.

>> When you consider our unfunded pension liabilities, our unfunded medical obligations, rising construction costs for our planned infrastructure projects (such as police and fire stations), other aging infrastructure, and many programs that Palo Altans want to see that are not funded (things like the animal shelter, park improvements, a Cubberley community center and more), we do not have excess funds, and are faced with potentially needing to reduce services in coming years.

We know all that, but, we also don't like being asked for more taxes to build stuff, only to find out that we have an open-ended employee salaries-and-benefits problem. I would like the city to seriously consider how it could forward fund employee pensions-and-health-benefits, in a way that would allow taxpayers to feel like the books are closed at the end of the fiscal year. Right now, we taxpayers don't know whether or not we can afford new police and fire stations, the animal shelter, park improvements, and more. We don't know whether we are over-committed, in the way that, for example, Stockton became when it got over-committed, only to go bankrupt, and have to renege on retired employee health benefits. Web Link.

In my opinion, city and county governments need a solid way to keep accounts current, so future obligations don't sink future budgets. As I said, sure, there are a lot of things city residents would like to spend money on, but, we really don't know whether or not we can afford them, based on future obligations.

Tom, thanks for the clarification. Re the surplus, every year Palo Alto Utilities runs a surplus of around $20,000,000 which gets funneled out of our pockets into the General Fund. And every year CPAU raises our utility rates.

Given that, what's the status of the lawsuit against these "over-charges" (to be polite) and when will CPAU stop raising rates EACH year and/or start giving us back OUR money for their over-charges.

The planning department can negotiate deals with developers to build affordable housing on terms that work. That will be cheaper than the city providing financial subsidies.

People complain about too much commercial development, but the number of jobs added in the last 20 years in Palo Alto is not as grreat as the surrounding cities. The big increase is the cost of PA housing is only due in small part to jobs in zoalo Alto.

In any case, the price of homes and condos has been dropping for the last year. The big spigot from China has slowed if not stopped. Palo Alto needs to start getting up to speed with 300 units per year to keep some downward pressure on housing costs.

However, we now hear hypocritical PA homeowners complaining that their house prices are dropping.

"The big increase is the cost of PA housing is only due in small part to jobs in Palo Alto."

Sure, but most of the congestion and ALL of the pressure to build more stack-and-pack hamster hutches is the result of that increase in jobs. We need to start tearing down office complexes immediately, and replacing them with liveable, single-family starter homes for young parents, and perhaps a park or two.

Bringing back PC's for housing is a good move. The overwhelming majority of our affordable housing citywide has come through PC's over more than 40 years of doing them. PC's for office and mixed use PC's were where our problems have occurred.
However, the council added two aspects last night that go beyond what the staff report indicated, which did not receive public input, and did not seem to be well thought through by the council.
First, The process will have the terms of the PC worked out between the developer and staff. The council (and public) will be subject to a new "guideline" that seeks to omit CC input on the special PC zoning exceptions granted. What will happen when a project comes to the council and council members like the project in general, but think certain aspects need to be modified? They'd be left with an up or down decision, or needing to ignore their own guidelines.
The second issue is the change that will allow PC's that are mixed use office/residential, as long as the residential part is equal to the office part in its impact on jobs to housing. The purpose of bringing back PC's was supposed to be to help the housing deficit, particularly in affordable housing. The council is understandably concerned that failure to meet our RHNA numbers for market rate housing could mean the city would lose much of its authority in approving mixed use projects, even ones that are mostly office. But we need to focus on the problem which is to add more housing (of a range of types) than jobs.

>> However, we now hear hypocritical PA homeowners complaining that their house prices are dropping.

I guess you and I know different homeowners. I know quite a few, and, quite a few of those have acknowledged the dropping prices along with something like a factual "as we all knew would happen". I haven't heard anyone being hypocritical about it. What we all knew would happen, has been happening. Prices go up, prices go down. And, .... ?

The post by Councilmember DuBois stands as a perfect example of why the proposed business tax needs to be specific. In one short post he reminds us how CC could easily divert revenue from a general tax to pay for:

CC needs to revisit their decision about this. If they do not, I think we can expect our transit problems to stay about the same (due, ironically, to lack of funding) until they decide that a special tax is needed for transit.

It is just stupid to push for housing when there is no end to the office development and job growth. We will never catch up when surrounding cities continue to add more jobs and the state government allows them to foist the need to house these workers to other communities.

We are overcrowded and the answer is to require a one job - one house policy for every city. No more passing the buck.

Palo Alto with the office cap has essentially not added more jobs, but next door Facebook and Goggle are adding tens of thousands and I don't see any high rises going up in those cities to house tens of thousands of workers.

Why are politicians so dumb - oh wait - they are getting paid off by developers and large tech firms and now are forcing us to destroy our quality of life to house the minions to work for their bosses.

It is time for cities to sue to stop the crazy development. It isn't just Washington that is run by a crazy person. California is run by a horde of development happy, overpopulation pro-growth nuts who are destroying this state.

In 2013, city council members, "residentialist" and "pro-development" alike agreed that using the Planned Community (PC) zoning tool for the purpose of getting affordable housing for low-income seniors was not just appropriate but necessary to realize a major public benefit--the affordable housing itself. Critics scoffed at the idea and melded the public benefits claimed by the non-profit Palo Alto Housing Corporation with the phantom public benefits agreed to by the city while approving projects that benefited developers at the expense of the public.

As a result of the successful referendum overturning the Maybell project, the PC tool was removed from the city's toolbox and put outside to rust. We'd find other ways to accomplish our housing goals. But we didn't. After seven years of abject failure to come close to our own housing goals, and with the state losing patience, we arrive back at a unanimous agreement by a council split on many issues, that Palo Alto must clean up that rusty old PC tool and put it back in the toolbox because it just might do some good if properly used.

@Crazy people rule! I get your point but have to ask: have you been next door? Redwood City is bustling with construction, much of it housing and much of it high. I do not want to see that sort of densification throughout jobs rich Palo Alto but I do anticipate having to accept some new housing development. Pro-development Council majorities have been teeing us up for densification for years and now, thanks to them, we are well and truly stuck in the vortex of a housing shortage.

There may not be a lawsuit over this, but there will be an election . . .

We have nice looking buildings downtown that were built to be offices. Let's just boot out the companies (company? Are they all occupied by Palantir?) and turn them into apartment buildings. There should be no more office buildings permitted. If housing is the priority, housing is the only thing that should be built. Adding more offices (vacant holes on University generally precede office buildings) is just totally counterintuitive if you're trying to bring housing up to equal jobs.

Developers have shown time and time again that their "community benefits" are nothing but a mirage. See the non-existent grocery store in College Terrace. Worse, the city has shown time and time again that they cannot write enforceable contracts for such "community benefits".

I don't trust developers to provide what they claim, and I don't trust the city to be able to enforce the contract. Therefore I oppose this "zoning tool".

Homeowners should make the city more affordable for others? I won't be supporting that parcel tax or a business tax or Alison Cormack if she runs again. Redevelop Buena Vista and you will have more money than you can imagine to spend on affordable housing.

I don't know whether to call this notion porcine lipstick or a wool clad wolf but, given our council's prior record of eager gullibility for the phantom "benefits" fronted for outsized commercial projects under PC, I suspect the latter. There must be some really big commercial developments in the pipeline, backed by heavy money. And this is an election year, right?

>> I don't know whether to call this notion porcine lipstick or a wool clad wolf but, given our council's prior record of eager gullibility for the phantom "benefits" fronted for outsized commercial projects under PC, I suspect the latter.

Definitely the latter. Formerly, I gave them the benefit of the doubt and assumed that they were just arithmetic-challenged, as so many people are. But, several recent votes have put it right out there. "They" will vote for any project with "housing", even if, arithmetically, it makes the jobs/housing imbalance worse. They can't be that arithmetically-challenged; they just think *we* are suckers. Apparently, they've been right.

Rather than subsidizing housing with tax breaks, we should tax the hell out of office buildings. We could use that money to hold the developers and Sacramento politicians at bay. If the tax is high enough, it might even tip the economics back toward housing.

>> Rather than subsidizing housing with tax breaks, we should tax the hell out of office buildings. [...] If the tax is high enough, it might even tip the economics back toward housing.

It seems to me that zoning a piece of land for housing *ought* to tip the balance toward housing, since the owner/developer *can't* build office space, right? What kind of clue do developers need so that they will get the point -- we don't need any more office space here.

Perhaps we need a combination of zoning AND other measures: tax on office space per square foot, tax on FTE's (full-time equivalent-- two 1/2-time == 1 full time etc). Exempt small business.

In another thread, "tech", and the proxy, "patents awarded" were taken as signs of vibrancy. Highly debatable, but, in any case, I wonder why any business bigger than 150 people can't locate non-creative stuff like HR, logistics, supply, etc., out by Tracy, which seems very well situated as a logistics hub. I'm sure the employees would appreciate the shorter commutes and more affordable housing. If the boss back in Palo Alto needs to talk things over with the folks in Tracy, I suggest videoconferencing, which has the additional advantage that it doesn't transmit colds, flu, SARS, or Coronavirus.